In the case of United States v. Bank of New York & Trust Co., 1935, the Supreme Court ruled in favor of the U.S government over a dispute regarding interest payments on Liberty Bonds held by foreign investors during World War I. The bank had withheld tax from interest paid to non-resident aliens and remitted it to the government as required by law at that time. However, later changes in legislation made these withholdings refundable but when applied for, they were denied by authorities citing statute limitations. The court decided that since there was no clear intent shown in Congress's legislative history to bar such refunds due to statutory limitation periods, these should be allowed even if claimed after many years have passed since original withholding took place.

In the dissenting opinion for United States v. Bank of New York & Trust Co., it was argued that the majority's decision to allow the government to recover funds from a bank, which had been deposited by an embezzler without knowledge or suspicion on part of the bank, was unjust and set a dangerous precedent. The dissenting justices believed this ruling effectively punished innocent parties (the banks) who were unknowingly involved in fraudulent transactions. They contended that such punishment should be reserved only for those who knowingly participate in fraud or illegal activities. Furthermore, they expressed concern about potential negative impacts on commercial practices and banking operations due to increased risk and uncertainty brought about by this ruling.